ABSTRACT
The price system is a curious institution. To some people it appears to be an impressive combination of very powerful controls; to others it is hardly more than an analytical model found in economic theory rather than in the real world. This chapter seeks to bridge the gap between the prerequisites of effective price system controls and the kind of practices to be observed everywhere in business. It addresses primarily to those who cannot reconcile their impressions of business practices with our description of price system controls. “Monopolistic competition” can be read simply as impure competition—that is, competition that fails to correspond in every detail with the hypothetical ideal of the theory of pure competition. The importance of role and personality to price system coordination is illustrated in differences between many New England enterprises and their counterparts elsewhere in the United States. The price system is only one of the mechanisms by which individuals economize.
